Impact of Omitting Observation-Status Data on Hospital Readmission Metric for Pediatric Care.

OBJECTIVES: Literature from Medicare beneficiaries suggests that hospital readmission metrics limited to inpatient encounters, omitting observation-status data, may not fully capture hospital performance and affect rankings. The impact of omitting observation-status data on this metric at the pediatric population level has not been fully assessed. STUDY DESIGN: This retrospective cohort study analyzed hospital stays for pediatric patients younger than 18 years old, using Healthcare Cost and Utilization Project state-specific databases from 5 states (Georgia, Iowa, Maryland, Nebraska, and Wisconsin) spanning 2016-2019. The primary outcome was the percentile change in hospital ranks based on 30-day risk-adjusted hospital readmission rates with and without observation-status data. We assessed correlations of the percentile change in hospital ranks with hospital-level percentage of observation-status use and with hospital pediatric care capability, reflecting diversity and complexity of pediatric care offered by a hospital. RESULTS: There were a total of 288 149 and 205 107 eligible initial inpatient and observation stays, respectively. The 30-day unadjusted readmission rate was significantly different between the 2 groups of initial stays: 5.10% and 7.55% after initial observation and inpatient stays, respectively (P value <0.001). Hospitals with higher observation-status use tended to shift toward worse ranking positions after including observation-status data, whereas hospitals with lower observation-status use tended to shift toward better ranking positions. This pattern was particularly evident among tertiary children's hospitals, which had a median improvement of 11.9 percentile points. CONCLUSIONS: Hospitals with lower observation-status use were ranked lower for pediatric care when using the inpatient-only metric, with a disproportionately negative impact on tertiary children's hospitals.